If a debt is passed to a collection agency, they'll get in touch with you to let you know that they're now looking after the debt. Just continue with your plan payments as normal. All this means is that you've been paying less than the agreed minimum monthly payment to your debts. It’s normal to receive default notices if you’re on a debt management plan (DMP) or token payment plan (TPP). You'll find creditors are less interested in the default as time passes, and eventually it’ll disappear from your credit file.ĭebt management plans and default notices

It's important to remember that a default doesn't last forever. Please contact us for further advice if you think this might affect you. This is a risk if your current employer regularly credit checks you, or if you’re applying for a new job that requires a credit check. Some jobs in the financial services sector may be affected if an account defaults. It won’t be impossible to get credit, but you may have less choice and cost you more. Others will give you credit but they'll charge you a higher rate of interest. Some creditors will refuse your application when they see the default on your credit file. They'll take this into account if you apply for other credit.Īfter six years, the defaulted debt will be removed from your credit file, even if you haven’t finished paying it off. You'll also find other types of credit such as mortgages and even mobile phone contracts may be harder to get.Īny creditor who checks your credit file in this time will see the default. This means it’ll be harder to get credit cards, loans or bank accounts because the default tells the creditor there’s a greater risk of you not paying. The wording of default notices was set in a 1983 law, before free debt help from charities like us was widely available.Ī default will appear on your credit file for six years, even if you pay off the debt in full.

The deadline to make this payment – you must get at least 14 days to do thisĪn information sheet from the Financial Conduct Authority (PDF) will be enclosed with the default notice recommending you get free debt help, from us or another charity.Ī default notice will suggest you contact a solicitor or Trading Standards for help.

How much you need to pay to bring your account back up to date.

The default notice will also give you the following information:

'Default notice served under section 87(1) Consumer Credit Act 1974'.

'Important you should read this carefully'.

A default notice has the following text at the top in large or bold letters:

Default letter sample